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Secession

By: Keith Weiner | Thursday, January 10, 2013

This article originally appeared in The Gold Standard, the journal
of Gold Standard Institute.

Many people are angry about the outcome of the election. While there is some
soul searching, there is also a large and growing disgust, not just with President
Obama but with the electoral process and the country itself. Out of anger and
frustration, some people are calling for secession, though it's unclear how
many.

It is easy to see the attraction. Let each "side" go its own way. Red states
can be "conservative" and blue states can be "liberal" (those terms have different
meanings in America than elsewhere). No more strife at the ballot box; let
each side be governed as it chooses.

There are two problems. First, there is not much difference between the "liberal" and "conservative" positions.
Both believe in paper money, public education, regulations and permits, transfer
payments, progressive taxation, government-provided retirement and healthcare,
massive taxes on inherited wealth, government-provided transportation, and
many other statist ideas.

Second, these two groups are not neatly sorted out with one group on one side
of a line and one group on the other side. Even in the "liberal" state of California,
the "liberals" are in Los Angeles and San Francisco and the rest of the state
is "conservative" for the most part.

The situation today is totally unlike the situation in 1860 (the only time
secession was attempted), in which there were distinct ideological groups and
they were geographically separated.

Today the majority is unhappy with the consequences of ideas they themselves
believe in. We can see this with the "conservatives" saying that if they were
elected, they would repeal Obama's version of socialized medicine and replace
it with a "common sense program to provide universal health care access." As
if their version would somehow incorporate "common sense". As if there could
possibly be "common sense" in taking money from some people and using it to
give free benefits to others.

Secession is no solution for the any of the problems that plague us today.
Let's look at what it would mean in reality.

The original idea behind Southern secession was that states have a "right" to
allow whites to impose slavery on blacks. Of course, states do not have "rights".
Rights are by definition and by nature individual. But many today hold the
idea that states should have a "right" to impose the laws that the local voters
desire, such as imposing religion on the population, or group-based welfare.
These ideas will fail at the local level for the same reason they fail at the
national level.

Now think of what secession would mean, especially if it really picked up
momentum. Ultimately, there would be 50 countries (or more--why can't Northern
California secede from Southern California, if California can secede from the
US?), each with its own diplomats and armies. There would be innumerable borders,
across which the flow of people, goods, and money would be restricted and/or
taxed.

What would happen if people in each region were forced by circumstance to
eat only what could be produced locally? Once the flow of oil stopped, the
people in arid western states like Arizona would perish, as there is little
water without pumps powered by diesel or electricity. And how would oil pass
through so many borders between mutually distrusting (if not hostile, envious,
or trade-warring) countries?

What if other consumer goods had to be produced locally? There could be no
such thing as a computer, as the chips in computers require a worldwide market.
There could not be 50 local Intel corporations. Nor motor manufacturing, pharmaceuticals,
pumps, power plants, lighting, etc. Even if there were no wars--started because
one of these little countries thought to plunder another--there would be large-scale
death and a huge decline in the quality of life.

Could law enforcement exist this way, and what of respect for law and order?
It would be an environment of strained public budgets combined with mass anger.
Those who feel entitled to be given free stuff could form gangs to take it
from anyone they find.

And think of your money. You wake up one day, and the US dollars in your bank
account are replaced with Texas "Stollars" or "MontanaBucks". North Dakota
already has a state-run bank, and other states could follow suit. The only
thing worse than the current system where money is borrowed into existence,
is one in which the legislature can print it at will. Could "Dakotars" hold
any value?

Breaking this once-great country into 50 remnants will guarantee that we collapse.
And this is why I am writing about secession. The theme is the same as with
the gold standard.

We must work to prevent collapse.

I don't know if some Romans in 465AD thought that collapse would help them
restore a more honest form of government. We do know now that their civilization
did not bounce back for over 1000 years after it collapsed.

The fight for the gold standard is the fight to preserve civilization and
prevent collapse. Opposing secession is part of the same fight.

Keith Weiner is CEO of Monetary Metals, a precious metals fund company in
Scottsdale, Arizona. He is a leading authority in the areas of gold, money,
and credit and has made important contributions to the development of trading
techniques founded upon the analysis of bid-ask spreads. He is founder of DiamondWare,
a software company sold to Nortel in 2008, and he currently serves as president
of the Gold Standard Institute USA.

Weiner attended university at Rensselaer Polytechnic Institute, and earned
his PhD at the New Austrian School of Economics. He blogs about gold and the
dollar, and his articles appear on Zero Hedge, Kitco, and other leading sites.
As a leading authority and advocate for rational monetary policy, he has appeared
on financial television, The Peter Schiff Show and as a speaker at FreedomFest.
He lives with his wife near Phoenix, Arizona.